The Hindu Business Line : TRAI tightens screws on Internet service providers

Key Proposals
FDI cap for ISPs to be brought down to 74%
Category C licence to be done away with
IPTV kept out of the purview of ISP licence

New Delhi May 10 Sounding the death knell for smaller Internet Service Providers in the country, the Telecom Regulatory Authority of India has proposed to do away with the district-based Internet licences, apart from making it mandatory for all ISPs to pay an entry fee and an annual licence fee. Announcing its recommendations on a new Internet services regime, TRAI has also proposed to bring down the FDI cap for ISPs from 100 per cent to 74 per cent.

ISPs, at present, do not pay any licence fee or entry fee. If the TRAI recommendations are accepted, then nearly 100 ISPs will have to fork out between Rs 10 lakh and Rs 20 lakh for State level and national level ISPs licenses, respectively. They will also have to pay a uniform licence fee of 6 per cent of their annual revenues.

TRAI said that the recommendations are aimed at addressing issues relating to financial viability, grey market and competition, including level playing field with other telecom service providers. The regulator also said that it aimed to weed out non-serious players in the sector.

While there are 389 companies which have an ISP licence, only 135 are functionally active. Out of this, 20 top ISPs own 95 per cent of the 8.5-million Internet subscribers. "It is reported that approximately 85 such licensees do not even have the correct address on which the licence was issued. Taking a serious view, TRAI has recommended that these ISPs be immediately inspected by DoT Vigilance Monitoring Wing to ascertain their presence, nature of activities and financial viability," said a TRAI release.

TRAI has suggested that non-functional ISPs should either surrender their licence or pay a minimum annual licence fee of Rs 50,000, Rs 10,000 and Rs 5,000 for national level, State level and district level service providers, respectively. It added that the ISPs at the district should migrate either to the State-level or national level category.

ISPs said that the TRAI recommendations were retrograde. "It is very clear that TRAI wants to promote only the bigger players. The truth is that it is the category C ISPs operating at the district levels, which are providing valuable Internet services in small towns and villages.

At a time when the Government has declared 2007 as the year of the broadband, these suggestions are acting contrary to that objective," said Mr Rajesh Charria, President, Internet Service Providers Association of India (ISPAI). Mr Charria operates a district-level ISP under the brand CJ Online in Ghaziabad, which will either have to forcefully move to a State level ISP by paying the charges or shut shop.

More Stories on : ISPs | Regulatory Bodies & Rulings | Telecommunications

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Monsoon sets in early over Andaman Sea

Norms for domestic airlines flying abroad may be reviewed

All sick fertiliser units will be revived: Paswan

Liberalised remittance scheme: RBI prohibits some transactions

SEZ units may have to allot shares for land

SBI Mutual launches infrastructure fund

Focus turns to mid-cap cos with insurance link

Asian Paints Q4 net trebles on sales push

LIC gets lion's share in Maruti stake sale

Bajaj Auto to consider demerger on May 17

SRIT develops algorithm for contextual search

TRAI tightens screws on Internet service providers